The Port Townsend Paper Company shown on Jan. 30, 2019. The City of Port Townsend will not renew its 63-year-old operational lease of the city’s Olympic Gravity water system, but officials expect a new pact to be in place before it expires. (Jesse Major/Peninsula Daily News)

The Port Townsend Paper Company shown on Jan. 30, 2019. The City of Port Townsend will not renew its 63-year-old operational lease of the city’s Olympic Gravity water system, but officials expect a new pact to be in place before it expires. (Jesse Major/Peninsula Daily News)

City of Port Townsend, paper company need updated water lease

Current agreement, in place since 1956, expires in March 2020

PORT TOWNSEND — City Manager David Timmons notified the Port Townsend Paper Corp. in a letter last week that a 63-year-old operational lease of the city’s Olympic Gravity water system will not be renewed.

But both Timmons and Kevin C. Scott, the general manager of the mill, expect a new pact in place by the time the current agreement expires March 15, 2020.

“What was allowed 50 years ago is not allowed today,” Timmons said. “We have to update the program and then transition from the old agreement to the new agreement.”

The expiring lease, which has been in place since 1956, allows the mill to use the water system that starts at the Big and Little Quilcene rivers through City Lake and Lords Lake to the city’s wastewater treatment plant. The city allows the mill to use all the water except for what the city needs for drinking requirements.

“The mill and the city have had a long-standing, effective relationship under the current waterline lease that has provided reliable supply and operations since its inception,” Scott wrote in an email.

“We hope to continue working with the city to negotiate a mutually beneficial agreement that will assure long-term operation of the mill while providing ongoing support and benefit to the city.”

Timmons said 100 years of history exists between the city and the mill. The question is how to move forward and comply with state law.

“It’s a city-operated facility, so there would be a rate and fee structure for both the city and the mill for sharing the cost and maintenance of the system,” he said.

“The lease isn’t in the correct form in today’s world.”

Timmons said if the city were to give the use of the water to the mill as a gift, it would need to demonstrate equal value received.

“You really can’t make that assessment in the current lease,” he said. “There are uniformity standards; you can’t sell water for less than it costs.”

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Jefferson County Managing Editor Brian McLean can be reached at 360-452-2345, ext. 56052, or at [email protected]

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